The rich even richer

Before going into recess, the Republican-controlled Senate rejected an Obama administration proposal that would have extended bankruptcy protection to Puerto Rico. Puerto Rican leaders tried to lobby Congress, but they came up against powerful foes.

The Puerto Rican governor, Alejandro García Padilla, has long warned the U.S. territory is in a death spiral and that the $72 billion in debt is unpayable. Over the weekend, García wrote to United Nations Secretary-General Ban Ki-moon complaining the federal government is backtracking on the sovereignty rights granted to the island’s residents when the Commonwealth of Puerto Rico was created in 1952.

Oppenheimer Funds, Franklin Templeton, and hedge funds, some specializing in distressed debt—the D.E. Shaw Group, Angelo Gordon, along with Marathon and BlueMountain. One is that the government of Puerto Rico, knowing the problems it had because Congress is not allowing it to have bankruptcy protection, it passed its own bankruptcy law. And in 2014, the hedge funds went to court and said, "No, no, no, Puerto Rico does not have the legal authority to do its own bankruptcy law." Lots of poor people that they were right and persuaded them to voluntarily give up some of the few things they had to make them even poorer and the rich even richer, so the rich could have more and more and the poor less and less.

Ted Rudow III, MA